How do you diversify your portfolio among the crypto markets?

QUESTION

Hello Carter,

My name's Chuck. I am a singaporean living in Bangkok. I recently got interested in the cryptocurrency market and am still really new to this. I came across your web and signed up for the news letter. Want to shoot you an email saying that i find your articles very useful. Love the first PDF and also the checklist. Almost succumbed to FOMO just a week ago and just nice i received your checklist in my email. Going to be using that to gauge my buying and selling decisions.

Would like to ask a few questions if you dont mind answering;

How do you diversify your portfolio among the crypto markets?

There are overwhelming amount of information all around, how do you filter out what is noise and what is gold information?

There are so much volatility in this market, what kind of strategies/techniques you use to stay in front of this market and keep your profits up?

Hope to hear from you. Thank you!

Best Regards,

Chuck

ANSWER

Hey Chuck!

Thanks for the note. Appreciate it. And I’m glad that checklist helped you. I use it daily to keep myself in line haha

Answers to your questions:

1. I diversify in two ways – dollar cost averaging (time diversification) and platform diversification. The dollar cost averaging is pretty straight forward and explained in the first PDF you probably read in the emails.

The second is that I typically buy mostly top market cap coins (BTC, LTC, ETH, XMR, etc) as a majority of my portfolio.

Then I’ll allocate about 15% to the smaller coins. The key, however, is to buy mostly smaller coins that are based on different platforms.

A lot of people buy 10 alt coins but they’re all using ETH as their blockchain. That’s actually not diversifying much at all since they’re tied to the success of Ethereum. That’s why I like platforms like Stratis, Ark and even Monero/Aeon – they’re independent and different blockchain structures.

2. My golden rule is that I only buy in two situations:

Situation 1: I believe in the coin/team/idea/future and have no intention of selling for 5 years. This is a majority of what I buy. The information is really just research – BTCtalk forums, reddit, website, etc.

Situation 2: I have some sort of competitive advantage. There have been situations where I get access to deals that the average person does that and it gives me a competitive edge. That’s a good buy (assuming it’s a winner)

Other than that, most of the news out there is just hype. Remember that the news business is build on one metric – how many eyeballs can each article get. They will publish anything to make that happen. I definitely do not trust FB groups but I do find it helpful to watch discussions so I can see what certain market sentiments are.

Buy the rumor, sell the news. Happens every single time.

3. I’m not a short term trader so it’s hard to answer. The best thing I can tell you is that you will make your money on the “buy” side of any deal. That checklist is really a goldmine for this – I only buy when the market is down at least 15%. That has helped me make a lot of money consistently so far.

The other thing is that I’m playing this on a 5 year window – I don’t care if something goes down one week vs another week. I’d rather get a 500% return in 5 years than try to hunt down 30% every day. I’d lose my mind, personally 🙂